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A bursting bubble?

Posted by John Beech on April 20, 2009

Almost since the Premier League first sold its broadcasting rights and started on a seemingly unstoppable upward spiral, sports management academics have debated when the bubble was going to burst. Over the years the debate has become less fruitful, and less frequently aired.

North of the border it could just be that the bubble is about to burst. Setanta took over SPL broadcasting rights in 2004 and have not only the current contract but also a contract worth £125m for exclusive coverage for four seasons beginning in 2010 (1). It is that future contract that they are currently seeking to renegotiate. Any renegotiation downwards would hit the smaller clubs in the SPL disproportionately, and will doubtless be strongly resisted. Adding to the uncertainty are events south of the border.

Phil Gartside, Chairman of Bolton Wanderers, has been drumming up support for a revised Premier League. In October he called for a two tier Premier League with two divisions consisting of 18 clubs each (2). His motivation was clear – to get more from broadcasting rights so that British benefactors could compete with foreign benefactors in feeding the habit (financial, that is) of the clubs’ players. Suddenly he was a convert to salary caps too. He floated the idea of no relegation from (and hence no promotion to) this new 36 club elite in English football (3) – a patently absurd idea that goes against the whole grain of the English league ethos.

The latest version of his plan is to be debated this week by his fellow Premier League Chairman (4). This version now envisages one club moving each way to and from the revised and reduced Football League between seasons (5), and, in a radical move, the 36 clubs would include Celtic and Rangers. That would require the approval of UEFA, who ostensibly do not allow cross-border league competition, although one only has to look at the examples of Cardiff, Swansea, Wrexham, Berwick and Gretna in the UK, and Monaco and Vaduz in continental Europe, to see that this policy is not always applied. The timing of a request for UEFA approval would not be helped by the controversial issue of a home team for London 2012.

Initial reaction from Celtic is reported as luke warm (6). Support from south of the border is not universal. Crystal Palace chairman Simon Jordan argues that the Old Firm should pay £100m to join such a new two-tier Premier League (7). Is his position on this issue in any way shaped by Crystal Palace’s current position in the Championship – 13th (and hence 33rd among a notional top 34, if Celtic and Rangers were to be included, or 36 if they were not)? There is thus no certainty that Crystal Palace would ‘make the cut’.

It is this ‘cut’ that would create the biggest challenge. Any cut based on current league positions would be arbitrary. Take the situation today, for example, a day chosen as arbitrarily as any other. The ‘good old boys’ of the Ribble Valley would be well represented in the elite, as would Greater Manchester, but over the Pennines in Yorkshire there would be anomalies – two Sheffield clubs in, but none from Leeds/Bradford.

Gartside is certainly right for calling for debate on league structure. But what is needed is not some tweaking based on potential broadcasting revenues, but rather a boldness to start with a blank sheet of paper. One parameter that should be considered is surely average gate. Leeds United are still averaging over 23,000 this season despite the fact that they are in League 1; only four clubs in the Championship are exceeding them; Doncaster, who would make the cut, are averaging less than half the Leeds attendance.

3 Responses to “A bursting bubble?”

John Beechsaid

Shortly after posting the above, it was announced that the Premier League will not be formally discussing Gartside’s proposal (1). What the informal discussion that will doubtless take place will produce remains to be seen. Phil Gartside is unlikely to let the proposal drop.